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According to Ferdows (1997), the reasons behind formation of MNCs include:
? reduce direct and indirect costs;
? reduce capital costs;
? reduce taxes;
? reduce logistics costs;
? overcome tariff barriers;
? provide better customer service;
? spread foreign exchange risks;
? build alternative supply sources;
? preempt potential competitors;
? learn from local suppliers, foreign customers, foreign competitors, and foreign research centers; and
? attract talent globally.
The earliest studies of MNCs were strongly influenced by the economics paradigm with the focus on offshore manufacturing...
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